New York municipal bond mutual funds invest in municipal debt obligations of issuers from the state. It provides the state’s investors stable income exempt from Federal and New York income tax. Meanwhile, municipal bonds, informally called “munis” are debt securities issued by state and local governments to borrow money. These are preferred by investors seeking a steady stream of tax free income in a choppy market. Munis come with lower yields compared to taxable bonds. However, they fetch better returns for investors in high tax brackets if we consider after-tax returns.
Below we share with you 3 top-rated New York muni bond mutual funds. Each has earned a Zacks Mutual Fund Rank #1 (Strong Buy) and we expect the funds to outperform their peers in the future. To view the Zacks Rank and past performance of all muni bond mutual funds, investors can click here to see the complete list of muni bond funds .
Columbia New York Tax-Exempt A (COLNX - Free Report) seeks total return through tax-exempted current income. COLNX invests the lion’s share of its assets in municipal debt obligations that are expected to provide interest income free from income tax of New York and federal income tax, which also includes the federal alternative minimum tax. COLNX primarily emphasizes acquiring investment-grade municipal bonds or unrated securities of a similar quality. COLNX is a non-diversified fund. The Columbia New York Tax-Exempt A fund has returned 2.3% in the year-to-date frame.
Catherine M. Stienstra is the fund manager of COLNX since 2010.
BlackRock New York Municipal Opportunities Investor A1 (MDNKX - Free Report) invests the major portion of its assets in New York municipal securities that provide return in the form of interest payment that are exempted from personal taxes of New York State and New York City. Returns from these securities are also free from federal income tax. MDNKX invests in securities that are rated investment grade. MDNKX invests in municipal securities including municipal notes, private activity bonds and insured municipal bonds. MDNKX is expected to maintain average portfolio duration between zero and 10 years. The BlackRock New York Municipal Opportunities Investor A1 fund has returned 1.6% in the year-to-date frame.
As of August 2015, MDNKX held 246 issues, with 2.85% of its assets invested in New York Liberty Dev Corp Libe Se 5.625%.
Columbia AMT-Free NY Intermediate Muni Bond Z (GNYTX - Free Report) seeks to provide tax free high current interest income with a relatively stable principal. GNYTX invests a large chunk of its assets in municipal bonds to achieve its objective. GNYTX invests in municipal debt obligations that provide interest income free from the federal alternative minimum tax (AMT) and other federal income taxes, including the New York individual income tax. GNYTX is a non-diversified fund. The Columbia AMT-Free NY Intermediate Muni Bond Z fund has returned 1.9% in the year-to-date frame.
GNYTX has an expense ratio of 0.50% compared to the category average of 0.87%.
To view the Zacks Rank and past performance of all muni bond mutual funds, investors can click here to see the complete list of muni bond funds .
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at https://www.zacks.com/funds.